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A competent plan document will deal with mid year distributions when there are questions about valuation of pooled assets. One of the provisions that goes with competent terms is the ability to perform a mid-year valuation at the discretion of the fiduciary. Liquidity is definitely one of the issues that should be addressed by plan terms relative to distributions. As suggested by others, you should be instructed concerning what to do pursuant to plan terms as interpreted by the appropriate fiduciary in accordance with that fiduciary’s prudent discretionary determinations.

Thank you for your kind words. The plan’s administrator might imagine it or he has reported as required, but that would not be so if one or more of the reported year-end values for the untraded shares is incorrect and not at least a good-faith estimate. As your discussion-opening post puts it: “There is no way to really know how much [an untraded share is] worth until it does actually sell.” If the plan’s administrator reported the untraded shares’ estimated value without support from an independent appraisal or other respectable valuation method, and one that measured the value as at each reporting date, the administrator might not have sufficiently reported. It might not be a prudent, or even good-faith, estimate to assume that an asset’s value is unchanged from a year’s end to the next year’s end. That might be especially so for an early-stage business. If a year-end value is off, assumptions about the proportions of different kinds of investments might be mistaken. And one or more disclosures about concentration risks might be incorrect. That the plan’s fiduciary does not expect an ERISA § 404(c) defense heightens the fiduciary’s responsibility regarding § 404(a)(1)(B) prudence and § 404(a)(1)(C) diversification.

Can be paid out concurrently but in two portions - RMD not RO-eligible and not subject to 20% w/h, and then a RO-eligible LS which is subject to 20% w/h to the extent not rolled over, either to another plan (401k as you mention) or IRA.